On Friday, the Western Areas Ltd (ASX: WSA) share price fell 5.2% to $2.53 following the release of its quarterly activities report.
What was in the announcement?
The company announced that it had total nickel production of 23,391 tonnes for the 2020 financial year. Costs for the 2020 financial year were $3.13 per pound, this was at the mid point of cost guidance. The average nickel price for the financial year was $8.50 per pound.
Western Areas had operating cash flow of $22.9 million in the final quarter of the 2020 financial year. It had cash at bank of $144.8 million and no debt at 30 June. Cash plus receivables and liquid assets were $190.6 million.
The company spent $33.2 million on mine development during the 2020 financial year which was below guidance. It spent $15.6 million on exploration which was at the lower end of guidance.
Western Areas announced that its Forrestania and Cosmos operations were materially unaffected by the coronavirus pandemic. The company also announced that the development of its Oddysseus mine had entered its final stage of underground rehabilitation for the project.
Western Areas Managing Director, Dan Lougher, commented on the results stating;
“It has been a busy quarter at Western Areas across many fronts, including exploration, project development and operations, while also advancing and building long term strategic optionality into the company via an investment in Panoramic Resources. Pleasingly, our assets continued to operate reliably and consistently, enabling the company to materially deliver into all FY20 guidance metrics, acknowledging a slight shortfall in nickel concentrate production, achieving 99.7% of guided production range. Most encouragingly during the quarter, our systemic and sustained exploration effort at the West Gawler Project in South Australia has started to show its potential as a new base metal region, with the first diamond drill hole at the Sahara target area intersecting a significant interval of mineralisation.”
About the Western Areas share price
Western Areas is a nickel producer and explorer with assets in Australia. It currently has two assets in production which, according to the company, are among the lowest cost, highest grade nickel assets in Australia.
In June, Western Areas announced that it had early success with two drill holes at Sahara, within the Western Gawler project in South Australia. The company discovered 104.42 metres at .21% nickel and .12% copper including 33.97 metres at .29% nickel and .17% copper.
Also in June, Western Areas bought a 19.9% stake in Panoramic Resources for $28.6 million.
The Western Areas share price is up 56.17% from its 52 week low of $1.62, however, it has fallen 16.5% since the beginning of the year.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
- Why the Vulcan (ASX:VUL) share price hit a record high today – November 12, 2020 4:52pm
- Bailador (ASX:BTI) share price jumps 12% on Straker update – November 12, 2020 12:46pm
- Why the Synlait Milk (ASX:SM1) share price was lower today – November 11, 2020 2:36pm